Tom draws a check, on his account in State Bank in New York, payable to Digital Media, Inc., in San Francisco. Digital deposits the check in its ac¬count at First National Bank. First National deposits the check in the Federal Reserve Bank of San Francisco, which transfers it to the Federal Reserve Bank of New York. That Federal Reserve Bank sends the check to State Bank.

-Refer to Fact Pattern 17-2.Tom's bank is
A)the cashing bank.
B)the depositary bank.
C)the intermediary bank.
D)the payor bank.

Question

Tom draws a check, on his account in State Bank in New York, payable to Digital Media, Inc., in San Francisco. Digital deposits the check in its ac¬count at First National Bank. First National deposits the check in the Federal Reserve Bank of San Francisco, which transfers it to the Federal Reserve Bank of New York. That Federal Reserve Bank sends the check to State Bank.

-Refer to Fact Pattern 17-2.Tom's bank is

-Refer to Fact Pattern 17-2.Tom's bank is
A)the cashing bank.
B)the depositary bank.
C)the intermediary bank.
D)the payor bank.

Quizplus · Accepted Answer

Tom's bank is considered the payor bank because it is the bank on which the check is drawn and has the obligation to pay the amount to the payee.

Tom Draws a Check, on His Account in State Bank